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Apr 19, 2013

Merck & Co. Opens Third Manufacturing Plant in China

  • Merck & Co. has opened a $120 million pharmaceutical plant in Hangzhou, China, that will serve as one of the pharma giant’s manufacturing bases for the Asia-Pacific region.

    The 75,000-square-meter (807,293-square-foot) plant is the second in Hangzhou – the first was completed in 1994 -- and the third plant in China for Merck, which calls itself MSD there and everywhere else outside the U.S. and Canada. The company’s other manufacturing plant is in Shanghai.

    “Merck is looking to bring more innovative medicines and vaccines to the Chinese people, and to supporting China's efforts to meet its healthcare demands," MSD China President Pam Cheng said in a statement. "With China's fast economic growth, rise in living standards, changing lifestyles, industrialization, urbanization and an aging population, more people across the country need quality health care and access to a strong medical system."

    As with other biopharma giants in recent years, Merck has grown its presence in China, and now bases more than 5,000 employees there. The company’s Chinese operations include a joint venture with Jiangsu-based Simcere Pharmaceutical Group announced last year, a marketing and sales organization in Shanghai, and an R&D center in Beijing. The R&D center opened in 2011, the year Merck committed itself to spending more than $1.5 billion in China over five years.

    Merck generated two thirds of that expense just last year: “China continues to be an important growth driver, reaching over $1 billion in sales in 2012,” Kenneth C. Frazier, Merck’s chairman, CEO and president told analysts February 1 on the conference call following release of the company’s fourth-quarter and full-year 2012 results. “China sales, ex-exchange, grew 22% for the full year, and about 30% in the quarter. The growth was driven by many products, across different therapeutic areas, including diversified brands and core brands.”

    Merck is among more than 30 biopharma giants that are planning to spend 24 billion yuan ($3.88 billion) in R&D in China over the next three years, the R&D-based Pharmaceutical Association Committee, told the Global Times newspaper, published by the Chinese Communist party-owned People’s Daily.

    Over the past two decades, Merck has introduced more than 40 medicines and vaccines in China, and committed $30 million over seven years toward the C-MAP agreement. Under C-MAP, China’s government joined with medical and health institutions, civil society, international organizations, grassroots healthcare workers and beneficiary groups to develop a program that promotes HIV/AIDS prevention and treatment, including reducing discrimination against people with the disease.

    Situated in the Hangzhou Economic and Technology Area (HEDA), the new plant has a capacity of 16 high speed lines to package pharmaceutical tablets and sterile Merck medicines for diabetes, cardiovascular, infectious, respiratory and bone diseases. The plant’s packaging capacity is currently estimated at more than 300 million packages annually.

    The new manufacturing plant received a current Good Manufacturing Practices (cGMP) certification in January. Air, waste and water management procedures and systems were built into the facility to help protect the surrounding environment – no small issue in China, where instances of severe pollution have prompted officials to finally tighten laws; Shaghai lawmakers, for example, are drafting a law with emissions limits for vehicles and factories.

    The new Hangzhou plant becomes the 72nd in Merck’s global network of manufacturing facilities for drugs and vaccines.


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